The Abbott government's long-awaited carbon tax victory was snatched from it by Clive Palmer, the billionaire coalminer who actually wants to abolish the tax.

As chaos descended on the Senate, it was Mr Palmer's insistence on harsh penalties for companies caught withholding price cuts after the carbon tax is abolished that stalled the legislation to repeal the carbon tax, and further fuelled the impression that the government is being dictated to by the crossbenches.

Clive Palmer arrives at Parliament House in Canberra on Thursday. Photo: Alex Ellinghausen

The air of chaos prompted Prime Minister Tony Abbott to reassert his leadership, dismissing what he called ''shouting from the sidelines'' by minor parties.

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In an exclusive interview with Fairfax Media, Mr Abbott expressed confidence that the carbon tax repeal would proceed on Monday, and appealed to critics not to judge the government by events in the Senate. ''The public will form their own conclusions, they don't need any help from me,'' he said.

Mr Abbott parried the suggestion that the chaos would also compromise his budget plans despite vast tracts of the May 13 formula being held up in the Parliament.

Illustration: Ron Tandberg

The Palmer United Party abandoned the government at the last minute and after the package of bills to repeal the carbon tax had been ''guillotined'', meaning they proceeded to a vote even though the majority needed to pass them had evaporated.

The bills, with the Palmer amendment, will be re-committed to the Parliament via the House of Representatives on Monday, with the government confident its majority for the package in the Senate will now hold.

It will constitute a fourth attempt to repeal the carbon tax.

Mr Palmer's PUP pulled the pin on an agreement to pass the repeal bill package at 11.50am on Thursday, claiming it had been double crossed by the government.

PUP senators and Motoring Enthusiast Party senator Ricky Muir sided with Labor and the Greens to defeat the government move, with a final vote just after 12.30pm rejecting the repeal 37 votes to 35.

Explaining his decision to renege on the deal, Mr Palmer claimed his amendment - which itself had been changed since it was first agreed with the government on Monday - had not been properly circulated.

''We asked that it be distributed and we had a violent action from government, a violent reaction I would say,'' Mr Palmer said. ''We had ministers calling us and visiting our senators and complaining.''

The problem arose because the Palmer amendment, inserting the penalties, had been expressed as a percentage and as such constituted a money bill. Under the constitution, money bills can only originate in the House of Representatives. However, the wording of the amendment has also raised questions over the application of the fines if enacted.

The opposition's Senate leader, Penny Wong, said carbon tax repeal had become an exercise in ad hoc lawmaking, raising big questions on the soundness of the legislation and creating damaging uncertainty for business.

''Australians are entitled to know does the price pass-through apply to all businesses or only to electricity and gas companies,'' she said.

''Maybe if the government had paid attention to proper process rather than just try to ram these through to get a political win, it may not have been in such a chaotic and shambolic mess.''

The government's leader in the Senate, Eric Abetz, said the legislation would pass next week.

''The Palmer United Party are committed to the repeal of the carbon tax, as is the government, so I believe that next week we can resolve the issues that were of a technical nature,'' he said.

Thursday's setback coincided with yet another for the government, when the opposition teamed up with the Greens and the crossbenchers to force the tabling of regulations for its watered down financial planning and advice laws.

The early tabling, which had been planned for next week, has paved the way for the new rules to be struck out next week via a disallowance motion.

Greens leader Christine Milne said the chaos in the Senate was ''government by incompetence''.

85 comments

The reality is just starting to dawn on Tony Abbott that his government is in real trouble. In his haste to get the carbon tax repealed he is opening up the floodgates on his leaky budget. Clive is now starting to assert his influence and has chosen the populist route by being all things to all people. The end result will be that there will be so many cost savings measures in the budget disallowed that it will be a mere shadow of its former self. The much vaunted repair job on Labor's debt and deficit disaster looks like falling into the PUP doghouse.

Commenter

JohnC

Location

Gosford NSW

Date and time

July 11, 2014, 7:30AM

I am sure many would understand when I say that it is difficult to fight back the tears - as I pen a tribute to the great man.‘An ode to Him’. Oh..Like the Greek pantheon of wondrous gods,Australia has its very own odds and sods.The Greeks had Mt Olympus as their home, Ours, the edifice of Capital Hill do they roam.Oh..In the Parliamentary cacophony of noble battle,Emerge our svelte saviour with pompous prattle. Our future is glimpsed – and his name is Clive,Other politicians, to be like him, all should strive.Oh..None have such grace and ineffable style, With his words of wisdom and boyish smile.Economic clouds and dark times ahead,Australia’s path forward - by Clive to be led.

Commenter

Howe Synnott

Location

Sydney

Date and time

July 11, 2014, 8:35AM

Funnily enough, though they are currently about $9bn down in their budget savings, they also haven't got the PPL scheme through, so they're really only about $4bn down net.

More importantly, they've still got through the majority of their savings already, so we're already in a far better position than when Labor was in power. When this is combined with the improving economy, I think through a combination of dumb luck and the parts of the hard budget they could get through, they should be close to a budget surplus as predicted.

Commenter

Nick

Location

Perth

Date and time

July 11, 2014, 8:59AM

An Ode To Clive

The sword of Karma thrust on Abbott’s leadershipClimate change is crap Abbott said once long agoWith gleeful charm the wondrous Clive foretellsA carbon tax repealed with all its climate coreA deathless death of Renewal Energy AgencyAnd tax cut compensation stays as carbon’s ghostYet it will be scrapped, repackaged for dear CliveThe Abbott deal to hunt him like his slogans speech

Beneath his Santa Claus grins, pouts, and smilesHis silver hair, informal garb and jeans, and quirkA mighty underdog in Abbott’s double-crossing plotThough strip of elegance but not yet short on truthAnd tell it straight void of Abbott’s slogans’ opulenceStill the media’s love affair with Clive Palmer startsIt shimmers leisurely with some hint of arroganceStill Clive’s allure serves high merit to Abbott’s fall

Commenter

Postgirl

Date and time

July 11, 2014, 10:08AM

Postgirl - oh my, where have you been?Such poets of style, the pickings lean.Your prosody and cadence lilting delight,To Abbott, your shibboleths take the fight.So.. Many a soul brings wit to enrich this site, With allegiances to the Left or the Right.A worthy contribution you have made, Don't leave such potential in the shade.

Commenter

Howe Synnott

Location

Sydney

Date and time

July 11, 2014, 11:51AM

Quote: "The government's leader in the Senate, Eric Abetz, said the legislation would pass next week"

Eric Abetz said the same thing last week because he didn't expect the Prime Minister Clive Palmer to change his mind! Eric get this into your head; it's not up to you or Tony Abbott if the legislation passes because you don't get a say in it, it's all up to the Prime Minister Clive Palmer.

Commenter

Bushy

Location

Cressy

Date and time

July 11, 2014, 12:46PM

Howe Synnott – no such poet I professA minute dazzled by Senate & Palmer’s toilIn blushing tone you make me fleeYet thankful of such pleasant nicetiesLet me enjoy my fanfare blushing dayGood day to you, Sir, so I say no more :-)

Commenter

Postgirl

Date and time

July 11, 2014, 12:48PM

As amusing as it is to see all those 2 x 4 timbers thrown into Tony's way, it is not amusing to see a government forced in to idle gear.

No matter really of what colouring the government of the day is, it has to have its chance to work its agenda. Even if this agenda is disliked by the largest portion of the population.

The fact that the (any) government is constantly held to ransom is really worrying.

A possible resolution is to call for a double dissolution election and the next government working on an election reform to prevent persons from joining either house if they do not get over a certain threshold in primary votes.

Commenter

Mountain Man

Location

High Country

Date and time

July 11, 2014, 1:12PM

"The reality is just starting to dawn on Tony Abbott that his government is in real trouble."

Spot on John C. And I hope the trouble just keeps coming for those lying, inept fossil fools.

Commenter

margi1

Location

Orange

Date and time

July 11, 2014, 1:18PM

"Penny Wong, said carbon tax repeal had become an exercise in ad hoc lawmaking, raising big questions on the soundness of the legislation and creating damaging uncertainty for business."

Yes, because we all know Penny Wong and Labor are all about creating certainty for business....

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